The ASX share showing explosive post-COVID growth

International borders are reopening in a hurry, and this Melbourne company is in prime position to take advantage.

Diverse group of university students smiling and using laptops

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

COVID-19 vaccination levels, at least in the developed world, have now reached levels where many devastated industries are starting to rebuild.

One of those sectors is international education.

As such, Wilson Asset Management likes the look of IDP Education Ltd (ASX: IEL) in their WAM Capital Limited (ASX: WAM) and WAM Research Limited (ASX: WAX) portfolios.

"While international students await for clearer signs of Australian borders reopening, recent developments suggest an improving outlook into 2022," said portfolio managers Matthew Haupt, Catriona Burns and Oscar Oberg in a memo to clients.

"We believe the market is underestimating IDP Education's ability to capitalise on the recovery in the global education sector and drive market share gains, underpinning strong earnings growth over the medium term."

IDP is in the business of placing international students into education institutions in Australia, as well as the US, the UK, Canada, New Zealand and Ireland. The Melbourne organisation also made a major acquisition in India back in July.

The company also distributes and administers International English Language Testing System (IELTS) tests.

"IDP Education is a co-owner of IELTS with the British Council and Cambridge Assessment," read the Wilson memo.

Shares for IDP have already gained nearly 80% this year so far, and more than 50% since the start of July. 

But the Wilson trio reckons they are far from a peak yet.

IDP's very upbeat trading update this week

Haupt, Burns and Oberg were especially impressed with the company's update presented at its annual general meeting on Tuesday.

They noted that, as international borders rapidly reopen, IDP's international student placement business has already seen a 120% year-on-year increase in those heading to the northern hemisphere.

"The company provided a positive first quarter FY2022 trading update at its annual general meeting, noting a strong recovery across its global network, with IELTS testing volumes increasing by 84% compared to the prior year," the Wilson memo read.

"Over the past 5 years, the company has invested substantially in research and development, and is now in the early stages of monetising an industry-leading digital platform, disrupting the traditional student placement model."

The Wilson team is not the only one bullish on IDP. Last week Morgan Stanley upgraded its price target to $40.20 while keeping it at "overweight" status.

IDP shares closed Thursday at $37.12, giving it a market capitalisation of more than $10.3 billion.

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Idp Education Pty Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Broker Notes

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

Broker looking at the share price.
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »

A young man talks tech on his phone while looking at a laptop. A financial graph is superimposed across the image.
Broker Notes

Guess which ASX 200 share offers 12% upside and a 4% dividend yield

Bell Potter just slapped a buy rating on this stock.

Read more »

A man leaps from a stack of gold coins to the next, each one higher than the last.
Broker Notes

Qantas or Telstra share price: Which will climb higher in 2024?

Let's see what top broker Goldman Sachs has to say about these ASX blue-chip stocks.

Read more »

A woman smiles as she sits on the bus using her phone and listening to music through headphones.
Small Cap Shares

3 small-cap ASX shares with 'long runways for growth'

DNR's Sam Twidale reckons investors could do worse than buy these guys for the long run.

Read more »

Woman using laptop for job search
Investing Strategies

2 ASX 200 shares to buy for 'strong growth' at decent prices right now

Searching for a bargain? Here's a pair that Catapult's Dylan Evans has his eyes on at the moment.

Read more »

A Paladin Energy miner wearing a hard hat and protective gear stands in front of a large mining truck and smiles to the camera.
Energy Shares

Uranium is set to boom, and this is the 'premium' ASX stock to buy

Shaw and Partners' Jed Richards reckons these are the shares to buy for the nuclear energy theme.

Read more »

female in hard hat crosses fingers
Investing Strategies

The ASX 200 stock that could get second time lucky

These shares have failed to impress in 2024, but many experts believe it's a bargain buy.

Read more »